Advertising was invented to grab the attention of a potential customer. The power of mass media and the ability to make hi-tech graphics allow advertisers to make more interesting presentations than, for example, ancient papyrus sales ads that Egypt had, although it is plausible that town criers of the Middle Ages also devised creative ways (probably through oration) to get the attention of people in their community.
Advertisements are all over the place – store signs, television, newspapers and magazines, billboards, the internet, and even on our cellphones. Even Facebook have ads! Ads that don’t make sense can be funny and therefore, an attention stopper; some ads annoy us, and others are just “fine” but nothing special that will prompt us to share them with our online contacts.
How much of the ads that we see are true and what constitutes false advertising? Lawyers.com defines false advertising as “the crime or tort of publishing, broadcasting, or otherwise publicly distributing an advertisement that contains an untrue, misleading, or deceptive representation or statement which was made knowingly or recklessly and with the intent to promote the sale of property, goods, or services to the public”.
Inflating the regular price and marking the item as a sale price when the regular price is in fact the item’s actual price is commonly believed to be false advertisement. This practice is so ingrained in some segments of the marketplace that retailers who offer a honest approach are not able to successfully compete with those who inflate and discount in their pricing strategy.
One study in a thrift store indicated a 40% drop in sales over a months’ time when a straight bottom line pricing strategy was introduced replacing the inflate/discount practice. Of course, it is legal to ask whatever price one wishes for merchandise so long as one has not taken advantage of an emergency situation to gouge the public. However if a customer is asked to bring a coupon to obtain a certain discount, the retailer must honor the agreement and the coupon, if not he has engaged in unlawful false advertising.
Under Contract Law, it is the customer who makes the "offer to the retailer" and the retailer who "accepts" the offer. Therefore the advertised asking price is not binding but is merely the beginning of a negotiation process. So although these strategies seem deceiving to some, they are the norm for flea markets and thrift shop merchandising strategies and in fact are operating within the law. This is true even though these practices are clearly an effort to convince the buyer that he is going to save if he buys this product even when in the absolute there is no discount or sale to begin with.
Rebates are sometimes misrepresented too because the buyer does not directly get the rebate from the seller; he needs to mail the manufacturer for the rebate, and it usually takes ages before the manufacturer actually acts on the buyer’s rebate. Fine prints on products or promos become deceptive when onerous or one-sided terms and conditions or vague statements are deliberately inserted therein knowing that the buyer won’t have the time to read all the fine print.
Other common forms of false advertising include fantastic promises in diet products and for this reason, advertisements of health related products are campaigns that are most scrutinized by the Federal Trade Commission as compared to other advertisements or products. When a product does not perform as promised this is an unlawful. Kevin Trudeau for instance was convicted in court and sentenced to ten years in prison for making false claims about the products promoted in his book. This is understandable because health related products are more difficult for a regular consumer to evaluate without help from an expert; such is not the case when a consumer decides which toaster is better than the others, since the risk reward is far less important.
The Federal Trade Commission (FTC) keeps business owners and advertisers at bay from making deceptive or misleading commercials. Images, phraseology and words are examined whether they are used to deceive a reasonable consumer into buying a product. The FTC also requires advertisers to substantiate their claims either through surveys or other studies that would prove that their claims are true, and offering money-back guarantees are not enough for the FTC to consider that there is no deceptive advertising.
Complaints for deceptive advertising are not limited to consumers in general. Pursuant to the Lanham Act, a company may file against a competitor if it strongly believes that the latter resorts to false advertising. gives companies the right to sue their competitors for making deceptive claims in ads. A company file a complaint against a competitor before the National Advertising Division (NAD) of the Council of Better Business Bureaus if the advertisement is a national or regional campaign; otherwise, he may file it before the local Better Business Bureau in his area. Complaints may likewise be filed before the Attorney General; the publication, radio station, or television station, that ran the advertisement; and of course, the FTC.
The FTC entertains reports from complaining consumers, conduct investigations, and imposes sanctions on the erring company. Complaints can be filed at the Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, DC 20580; by telephone: toll-free 1-877-FTC-HELP. While the Better Business Bureau also entertains truth in advertising complaints, they do not prosecute the false advertising company but merely makes a strike against it (which is almost like making a note on its record that it has been reported to advertise falsely). The Attorney General’s Office may prosecute complaints brought before it.
Consumers are advised to be cautious whenever purchasing a product. In the same breath, companies must also be responsible when selling their wares by not promising a consumer more than what they can actually deliver.
Exaggerations in commercials are commonplace and often funny. Aren‘t these exaggerations contrary to law? It is not if they remain true to their copy. Take for instance the 2009 Cheez-It commercial where a huge rectangular slice of cheese was shrunk to fit into a Cheez-It cracker. The advertiser is not claiming that this is how Cheeze-Its are made; the message is that there’s “Lots and lots of cheese baked into little bites”. The commercial was exaggerated to capture the audience’s attention and imagination so he will remember the product, but in essence the commercial remains true to its copy, the message the company wishes to convey. The same principle applies to most of the outrageous commercials we see. Awareness and recall are keys to a successful advertisement, otherwise it will be an utter waste of time, but a company that goes overboard and gets attention with false claims and promises they can’t keep is bound to be in deep trouble.
When special items are on sale and the seller have limited quantities of the item, they are required to disclose that stocks are limited; otherwise, they should have ample supply to meet all of the demands of the consumers. This explains why most store ads have disclaimers like this printed next to the item on special sale – so the public may know that it is not a regular item and that if an interested consumer does not get it sooner, he may not get the item at all when stocks run out.
Sellers have the responsibility of satisfying the customer, but beyond that, they must be ethical too in conducting business. Ethics is more than just complying with legal requirements; it includes the moral responsibility to do what is right and not take advantage of another by soliciting patronage through deceptive advertising. Wouldn’t it be wonderful if the political advertisements we see during the election season are likewise covered by truth in advertising laws? That would definitely be interesting.
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